September 14, 2008

10 Mistakes Buyers Make

What does the article say about using a lawyer? "Going without a lawyer is just plain foolish." Good advice.

Here's some bad advice from the article:

"Typically, buyers must pay the fees for both their lawyer and the
bank's at closing. You can save a few hundred dollars by having your
attorney also represent the bank. Caution: if you do this, then "your"
attorney works for the lender when he reviews the HUD-1 Settlement
Statement (which lists all closing fees) for accuracy. If you're able
to fully understand your HUD-1 Settlement Statement, go for it; if not,
you're making a mistake."

The closing attorney represents the bank and his or her duties and responsibilities for the lender go beyond review of the settlement statement.

Just like you should have a real estate agent that only represents your interests, your real estate lawyer should serve only you.

The article also states that "Real estate law is local. There are laws in the Commonwealth, but there is also local custom." Real estate law is the same throughout the State of Massachusetts. Only real estate agents have "customs," and your lawyer should care about what is best for you not what keeps the local real estate agents happy. If your real estate lawyer does not propose at least 12 additional paragraphs to the "Standard Purchase and Sale Agreement," you don't have a real estate lawyer.

On buying a fixer-upper, the article states, "Home repair is far more expensive and time-consuming than most
first-time home buyers imagine. Not having enough saved is a recipe for
foreclosure." This is so true. I tell clients all the time that no matter how great a price I negotiate for them on that home that needs $30,000 in work, it will be a disaster, if they only have $15,000 for repairs.

The article also discusses the importance of location. "Location is the thing you can't change." It's obvious, but first-time home buyers tend to lose site of that simple fact.

Comments

Thank you for the tip! They are right especially with the repairs. Inexperienced first-time buyers often say something like:"Repairs? Ah, we will make it SOMEHOW, don't worry!" Yes, two cracked tiles in the bathroom can wait, but burst water pipes or leaking roof can't wait - and if you wait your future expenses grow rapidly. It's especially tricky to buy an old house in the summer - many "minor" damages reveal their full power in the winter - and new owners can be shocked...
Regards,
Julie

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Question?

If you have a question for me about any aspect of the home-buying process (i.e., house hunting, mortgages, negotiations, buyer agency, purchase and sale, etc.), please don't hesitate to send me an email. I'm happy to try to answer your question.